A SEASON OF GROWTH, A YEAR OF ACHIEVEMENT ANNUAL 2017 REPORT Building an America where freedom, opportunity, prosperity, and civil society flourish. A SEASON OF GROWTH, A YEAR OF ACHIEVEMENT ANNUAL 2017 REPORT Heritage hosted more than 2,000 members and friends from across the country during our two-day Open House celebrating the Presidential Inauguration. COVER & INSIDE COVER: GETTY IMAGES; LEFT: WILLIS BRETZ LEFT: IMAGES; GETTY & INSIDE COVER: COVER 2 THE HERITAGE FOUNDATION | heritage.org ANNUAL 2017 REPORT A Message from the Chairman and President A Season of Growth, A Year of Achievement n 1980, Heritage’s 3,000-page Mandate for Leadership gave the incoming Reagan Iadministration and Congress a comprehensive set of policy recommendations for revitalizing the economy, strengthening national security, and halting the centralization of power in the federal government. Washington observers soon began calling it “the Bible of the the federal appellate courts goes on to the Supreme Court. So Reagan administration.” By the end of President Reagan’s these “lower” court appointments are critical. first year in office, hundreds of Heritage’s recommendations had been adopted—and Americans were benefiting from Promoting Pro-growth Tax Reform historic tax cuts and an economic recovery that hasn’t been The highlight of the year, of course, was the groundbreaking matched since. tax reform signed into law just before Christmas. In early summer, Trump asked Mick Mulvaney, director of the Office Heritage has now repeated that winning pattern. Preparing of Management and Budget, to come up with a plan to get for the election of a new president and Congress in 2016, America’s economy back on track. And Mulvaney quickly Heritage developed a new Mandate for Leadership—a six-vol- called on us to help. ume series of conservative, research-based policy recommen- dations calculated to help the next president “Make America Stephen Moore and our tax policy experts outlined these Great Again.” principles to guide the reform effort: lower both corporate and individual tax rates; increase standard deductions and By the time we closed the book on 2017, the Trump admin- reduce special-interest “carve outs”; promote entrepreneur- istration had embraced 64 percent of our 321 recommen- ship by making capital expenses fully deductible in the year dations. Congress embraced many of them too: enacting they are incurred; and establish a territorial tax system that once-in-a-generation tax reform, rolling back onerous levels the playing field for American companies competing in regulations, and starting the long haul toward rebuilding our the global marketplace. dangerously depleted military. And once again, Washington observers referred to Heritage as “the president’s think tank.” The reform package enacted in December reflects those princi- ples, transforming the tax code to one that promotes rather than Restoring Constitutionalism to the Courts penalizes economic growth. And the American people began to The year began strong, with the nomination and confirma- reap the benefits almost immediately—with higher take-home tion of Justice Neil Gorsuch to the U.S. Supreme Court. In pay, tax-cut-fueled bonuses, and a burgeoning job market. March 2016, candidate Trump had asked Heritage to help put together a list of superior candidates for the empty court seat. Reining in the Regulatory Regime John Malcolm, director of our Meese legal center, obliged. A In February, Congress began acting on another of our key rec- January 2017 Politico profile of Malcolm subsequently dubbed ommendations: to exercise their authority under the long-ig- him “the man who picked the next Supreme Court justice.” nored Congressional Review Act to overturn ill-considered rules implemented by the Executive Branch. Within months, There were many other outstanding judicial appointments as Congress used CRA resolutions to scotch 14 major rules final- well. The Senate confirmed 12 circuit court judges in 2017— ized by the Obama administration in its waning days. the largest number of appellate judges confirmed during the first year of any president in history. Most federal cases stop Also in March, The Washington Post reported that an execu- at the appellate level—only one of every 700 cases heard by tive order had “dismantled a White House working group on A SEASON OF GROWTH, A YEAR OF ACHIEVEMENT 3 Kay Coles James, President Edwin J. Feulner, Former President The Torch Passes eritage’s six-month search for a worthy successor to Heritage President Edwin J. Feulner Hcame full circle with the selection of long-time Heritage Trustee Kay Coles James. The decision was announced Dec. 19 at an all-staff meeting Heritage is many things to me: in Allison Auditorium. It was met with great enthusiasm • The single most significant force by Heritage staff, as well as conservative leaders across the in American conservatism, country. (See back cover.) • The home of the most extraordinary scholars and staff I’ve ever met, That enthusiasm is well-grounded. In a career spanning more • A network of dedicated alumni, who are not just a than four decades, James has excelled in a variety of posts in key part of the Heritage family but a vital asset for government, the private sector, the academy, and the non- promoting our agenda in every corner of America, profit world. In the late 1990s, she joined Heritage as a senior • A leading center for the training and expertise fellow and director of our Citizenship Project. She left to of the well-equipped team that’s so crucial to serve President George W. Bush as director of the U.S. Office advancing our principles and beliefs, of Personnel Management. In 2005, she was elected to our • And the living vision of the trustees and benefac- Board of Trustees. tors whose generosity supports us. Their intent is and will always be honored, and their resources In 2016, James and her Heritage colleague, former will continue to be shepherded wisely—because U.S. Attorney General Edwin Meese III, led President what they’ve helped to create must and will last Trump’s transition team for the Office of Management for generations. and Budget, Office of Personnel Management, and General Services Administration. With Kay Coles James at the helm, Heritage will remain, in the words of The Wall Street Journal editorial hailing her In her first address as Heritage president, James told the staff: appointment, “True North.” HILLS DAVID 4 THE HERITAGE FOUNDATION | heritage.org ANNUAL 2017 REPORT the social cost of carbon and rescinded a variety of Obama- era technical documents on the matter.” It was, the Post noted, “a big victory” for Heritage alumnus David Kreutzer, who “played an important role in shaping and writing the executive order.” That was just the beginning of a huge regulatory rollback. Trump lifted the Obama-era moratorium on coal leases on federal lands and instructed Executive Branch agencies to reconsider the misleadingly named Clean Power Plan and hugely intrusive “Waters of the United States” regulations. All of these deregulatory actions—and more—came recom- mended by Heritage. By year’s end, the Trump administration had withdrawn or delayed more than 1,500 proposed regulations. The change Mandate for Leadership was so significant, we had to change the name of our annual report on the number and cost of regulations from “Red Tape eleased in 1981, Heritage’s original Mandate Rising” to “Red Tape Receding.” Rfor Leadership offered policy recommenda- tions for making government more efficient and And those changes made a difference. On Dec. 14, Trump accountable. It became a surprise best-seller. It announced that the regulatory rollback had saved the also became widely recognized as “the Bible of the American economy $8.1 billion, and would save another $9.8 Reagan administration,” establishing Heritage’s billion in fiscal 2019. reputation as a mover-and-shaker in Washington. Moreover, the president embraced Heritage’s call for “culture In 2016, Heritage produced a Mandate for change” within the regulatory agencies. He directed them to Leadership series: six books containing 321 major be more deliberative about their rulemaking, to seek ways to policy recommendations for the incoming admin- offset new regulatory costs, and to create internal regulatory istration and the new Congress. Individual titles in reform task forces in each agency. the series were: The Road Ahead n Blueprint for Reform: A Comprehensive Policy Agenda Of course, it’s never all roses in Washington. We were sorely for a New Administration in 2017 disappointed when the Senate fumbled Obamacare repeal— n Blueprint for a New Administration: and fumbled it badly. Even though congressional conser- Priorities for the President vatives were able to fold repeal of Obamacare’s individual n Blueprint for Reorganization: mandate into the tax reform bill, there is much yet to do An Analysis of Federal Departments before we are rid of this unworkable, unaffordable attempt to and Agencies impose government-controlled health care on our nation. n Blueprint for Reorganization: Pathways to Reform and Cross-Cutting Issues Naturally, we are trying to accomplish much more than “just” n Blueprint for Balance: health reform. Our mission remains bold: to build an America A Federal Budget for Fiscal Year 2018 n Farms and Free Enterprise: where freedom, opportunity, prosperity, and civil society A Blueprint for Agricultural Policy flourish. And we have our work cut out for us! In its first year, the Trump administration As events like this spring’s March for Our Lives and School embraced fully 64 percent of the Mandate recom- Walk-Outs make clear, the Left continues to be better than mendations. No wonder the New Republic called conservatives in both messaging and mobilization. Their Heritage “The D.C. Think Tank Behind Donald sophisticated tactics enable community organization by a rad- Trump” and the University of Pennsylvania ranked ical few to look like organic action by millions of Americans.